Cash collection is the process of collecting cash payment to fulfill the debts of customers' overdue invoices. Debts currently being processed for cash collection are said to be in collections.[1]

Invoices are always issued with terms of payment.[2] These terms vary widely from 'Cash terms', meaning that the invoice is due immediately, to many forms of 'Credit terms' (for example 30 days from date of invoice[3]).

Unpaid invoices are considered outstanding, and those which remain unpaid for periods longer than their 'terms' indicate are considered overdue. It is the aim of the Cash collection function of a business to collect Monies for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become doubtful or bad.

See also

References

  1. ↑ Yale, Aly (2022-09-22). "What happens if your debt is sent to collections? - CBS News". www.cbsnews.com. Retrieved 2024-01-13.
  2. ↑ "Invoicing and taking payment from customers".
  3. ↑ "Getting your terms and conditions right | Business Link". Archived from the original on 2011-06-10. Retrieved 2010-04-11.
Wikiquote has quotations related to Cash collection.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.